VW CEO Mueller to submit remedy for fixing engine emissions problem to EPA chief


Volkswagen’s new chief executive plans to present remedies for fixing diesel engines that cheat on emissions tests when he meets with the top U.S. environmental regulator this week.

CEO Matthias Mueller said that as of now VW has only given technical data to the Environmental Protection Agency and the California Air Resources Board (CARB). But he hopes to reach an agreement with EPA Administrator Gina McCarthy in Washington on Wednesday when he presents her with solutions. VW requested the meeting.

Mueller’s trip comes as the German automaker and U.S. regulators are at an apparent impasse over how to proceed with the expected recall of nearly 600,000 “clean diesel” vehicles sold with secret software designed to make their engines pass federal emissions standards while undergoing laboratory testing. The vehicles then switch off those measures in real-world driving conditions, spewing harmful nitrogen oxide at up to 40 times what is allowed under federal environmental standards.

The cars include Jetta, Golf and other popular models dating to the 2009 model year. About 11 million cars have similar software worldwide.

McCarthy said last week the agency has not reached any agreement with VW after three months of discussions, and that she is anxious to bring VW into compliance with the Clean Air Act.

But Mueller continued to describe the discussions as productive. “It is my point of view, I tell you we are working together with the EPA and also with the CARB for three months, and from our point of view we did huge progress. And now we will talk to Ms. McCarthy and we’ll see how the reaction will be.”

He would not expand on what solutions the company will propose, but analysts say they will almost certainly be expensive and involve major modifications to the exhaust systems or the addition of a chemical treatment system to turn nitrogen oxide into harmless nitrogen and oxygen.

Mueller would not say if the company plans to buy back any of the cars.

The U.S. Justice Department, representing EPA, filed a civil lawsuit last week that could potentially expose VW to more than $20 billion in fines under the Clean Air Act. VW could incur additional civil penalties based on facts determined at trial.

A separate criminal investigation is underway, and numerous private class-action lawsuits filed by angry VW owners are pending.

The company also faces investigations by multiple state attorneys general, some of whom have complained that VW is not turning over documents that have been requested. Mueller said the source of the dispute is variations between German and U.S. laws governing corporate documents. “There is German law in terms of tighter protection, and that is not compatible to the American. And that has to be clarified,” he said.

VW first admitted in September that the suspect software was installed in cars with its popular 2-liter diesel engines. The company has thus far denied findings by U.S. regulators a smaller number of diesel vehicles with 3-liter engines contain similar software.

Mueller apologized again Monday for the scandal and said the company’s most important task in 2016 will be to win back its customers’ trust. He has suggested a small number of software developers in Germany are to blame for the suspect computer code.

The company has hired a U.S.-based law firm to conduct an internal investigation. The findings of that review have not yet been made public.